China’s Fosun posts 34% profit jump

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Fosun International, the aggressive Chinese investor that owns Club Med and Cirque du Soleil, said on Wednesday that profits climbed 33.6 per cent to Rmb5.86bn in the first half of the year.

The company’s net gearing ratio – a cause for concern among analysts that have said the company’s debt is too high – fell from 60.3 per cent at the end of last year to 47.4 per cent at the end of June.

Fosun has grabbed attention in recent years for a years-long global dealmaking spree that has seen it buy up financial institutions in Europe and the US while also chasing after deals for a pharma group in India and margarine company in France.

But more recently the company and its flamboyant chairman, Guo Guangchang, have attracted scrutiny from regulators in China that are unhappy with Chinese groups taking on high levels of debt in order to buy assets overseas.

In June, regulators asked banks to assess the level of lending they had extended to Fosun and three other acquisitive conglomerates – HNA, Dalian Wanda and Anbang Insurance.

Mr Guo vanished from sight in late 2015 only to return claiming he had been assisting authorities with an investigation. Rumours swirled once again this July concerning another sudden disappearance, sending the company’s shares falling. Those rumours proved false.

Fosun said on Wednesday that over the past five years it had hit an annual compound growth rate of 25 per cent in net profits. However, its directors did not recommend a dividend for the first half of 2017.

Photo: Getty

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